How did Atlassian perform in the third quarter of fiscal 2025?

Total revenue was $1,356.7 million, up 14% year-over-year, and subscription revenue was $1,272.9 million, up 19%. Cloud revenue growth was 25%. GAAP operating loss was $12.5 million and GAAP net loss was $70.8 million, or $(0.27) per diluted share. Non-GAAP operating income was $348.3 million at a 26% margin.

What is the financial outlook for the fourth quarter of fiscal 2025?

Atlassian expects total revenue of $1,349 million to $1,359 million, with Cloud revenue growth of approximately 23.0%, Data Center revenue growth of approximately 16.5%, and Marketplace and other revenue growth of approximately flat. The company expects a GAAP operating margin of approximately (5.0%) and a non-GAAP operating margin of approximately 22.0%.

Why did Atlassian include Rovo in its core editions, and what does it cost?

Atlassian included Rovo in all Premium and Enterprise editions of Jira, Confluence and Jira Service Management, with Standard to follow, to expand AI adoption and knowledge worker reach. Management said this will forgo some revenue in the near term in exchange for expected long-term upgrades, Data Center-to-Cloud migrations and monetization.

Why did Data Center and Marketplace revenue slow?

Data Center revenue grew 7%, driven primarily by price increases and partially offset by greater migrations to Cloud and fewer multi-year agreements. Policy changes limiting Data Center contract duration to one year contributed. Marketplace and other revenue declined 5% because third-party app sales for Data Center were lower, largely due to fewer multi-year contracts.

What are the key customer and balance sheet metrics?

Atlassian ended the quarter with 50,715 customers with more than $10,000 in Cloud ARR, up 14% year-over-year. Cash and cash equivalents plus marketable securities totaled $3.0 billion at March 31, 2025. The company also reported deferred revenue up 21% year-over-year to $2.4 billion in the shareholder letter.

TEAM 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed May 1, 2025. Cited figures are marked; the original filing is the authoritative source.

Atlassian Corporation reported results for the quarter ended March 31, 2025 (fiscal Q3 2025), with total revenue of $1,356.7 million^a, up 14% year-over-year from $1,189.1 million.

Subscription revenue was $1,272.9 million^b, up 19%, and Cloud revenue growth was 25% year-over-year. GAAP results were weaker: an operating loss of $12.5 million (operating margin of (1%)) and a net loss of $70.8 million, or $0.27 per diluted share. Non-GAAP operating income was $348.3 million (26% margin) and non-GAAP net income was $261.5 million, or $0.97 per diluted share.

Cash flow from operations was $652.7 million^c and free cash flow was $638.3 million, a 47% free cash flow margin. Cash and marketable securities totaled $3.0 billion at quarter end. The shareholder letter attributes the strategic focus to a shift toward apps, agents and purchasable Collections, with Rovo AI at the center.

Rovo is now included in all Premium and Enterprise editions of Jira, Confluence and Jira Service Management, with Standard editions to follow. Management acknowledged this will forgo some near-term revenue in exchange for long-term adoption and monetization. Data Center revenue growth slowed to 7%^d, and Marketplace and other revenue declined 5%, reflecting fewer multi-year Data Center contracts after a policy limiting Data Center contract duration to one year.

For the fourth quarter of fiscal 2025, Atlassian guided to total revenue of $1,349 million to $1,359 million, with Cloud revenue growth of approximately 23.0%, Data Center growth of approximately 16.5%, and Marketplace and other growth of approximately flat. It expects a GAAP operating margin of approximately (5.0%) and a non-GAAP operating margin of approximately 22.0%. The company also reported 50,715 customers with more than $10,000 in Cloud ARR, up 14% year-over-year.

02—Key points

Key Highlights

Total revenue of $1,356.7 million, up 14% year-over-year; subscription revenue of $1,272.9 million, up 19%
GAAP operating loss of $12.5 million (operating margin of (1%)); net loss of $70.8 million, or $(0.27) per diluted share
Non-GAAP operating income of $348.3 million (26% margin); non-GAAP net income of $261.5 million, or $0.97 per diluted share
Cash flow from operations of $652.7 million and free cash flow of $638.3 million (47% free cash flow margin); cash and marketable securities of $3.0 billion
Rovo AI included in all Premium and Enterprise editions of Jira, Confluence and Jira Service Management, with a near-term revenue trade-off acknowledged by management
Data Center revenue growth slowed to 7% and Marketplace and other revenue declined 5%, reflecting fewer multi-year Data Center contracts
Q4 FY25 guidance: total revenue of $1,349 million to $1,359 million; GAAP operating margin of approximately (5.0%) and non-GAAP operating margin of approximately 22.0%

03—Questions

Frequently Asked Questions

How did Atlassian perform in the third quarter of fiscal 2025?
Total revenue was $1,356.7 million, up 14% year-over-year, and subscription revenue was $1,272.9 million, up 19%. Cloud revenue growth was 25%. GAAP operating loss was $12.5 million and GAAP net loss was $70.8 million, or $(0.27) per diluted share. Non-GAAP operating income was $348.3 million at a 26% margin.
What is the financial outlook for the fourth quarter of fiscal 2025?
Atlassian expects total revenue of $1,349 million to $1,359 million, with Cloud revenue growth of approximately 23.0%, Data Center revenue growth of approximately 16.5%, and Marketplace and other revenue growth of approximately flat. The company expects a GAAP operating margin of approximately (5.0%) and a non-GAAP operating margin of approximately 22.0%.
Why did Atlassian include Rovo in its core editions, and what does it cost?
Atlassian included Rovo in all Premium and Enterprise editions of Jira, Confluence and Jira Service Management, with Standard to follow, to expand AI adoption and knowledge worker reach. Management said this will forgo some revenue in the near term in exchange for expected long-term upgrades, Data Center-to-Cloud migrations and monetization.
Why did Data Center and Marketplace revenue slow?
Data Center revenue grew 7%, driven primarily by price increases and partially offset by greater migrations to Cloud and fewer multi-year agreements. Policy changes limiting Data Center contract duration to one year contributed. Marketplace and other revenue declined 5% because third-party app sales for Data Center were lower, largely due to fewer multi-year contracts.
What are the key customer and balance sheet metrics?
Atlassian ended the quarter with 50,715 customers with more than $10,000 in Cloud ARR, up 14% year-over-year. Cash and cash equivalents plus marketable securities totaled $3.0 billion at March 31, 2025. The company also reported deferred revenue up 21% year-over-year to $2.4 billion in the shareholder letter.

04—Continue

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